presentation by harald magne glomdal
TRANSCRIPT
Faith Consistent Investing
New investments for the Faiths: Opportunities or sources of
conflict?
Agenda
• About Opplysningsvesenets fond• The SRI guidelines• The investment policy• Society Improving investing• Howe Faith Consistent are the investing?• Appendix
About Opplysningsvesenets fond
• Opplysningsvesenets fond is an endowment for The Norwegian Church
• Its English name is The Norwegian Church Endowment
• The beneficiary is The Norwegian Church
• The Ovf’s net asset value is 6 billion NOK (or 720 million EUR/900 million USD)
Ovf’s Organisation
Controller Administration
IT
Department ofFinancial Assets
Dep. of Forrestry &Agriculture
Department of Property Dep. ofProperty Development
Dep.of Ministers' Housing
CEO
Ovf's Board
Ministry of Cultural andChurch Affairs
Opplysningsvesenets fond total asset
Opplysningsvesenets fond's assets NOK 6 billion/EUR 720 million
20 %
4 %9 %4 %3 %2 %
54 %4 %
Non commersial asset
Domestic Equity
Fixed Income
Foreigan Equity
Absolut Return
Private Equity
Real Asset
Cash
The SRI Guidelines
Revenue and SRI criteria
• The Church must benefit from Ovf
• We needed criteria that would not take away that benefit
• We wanted to find out if SRI criteria outperform or under perform non SRI criteria
• There are 14 indexes with SRI criteria
SRI index vs Ordinary
Domini 400 (SBI)
S&P 500
DJSGI (SBI)
DJGI
Return (%) 16.22 15.02 12.22 9.30 Assess Return (%) 1.20 2.92 Standard deviation (%)
15.38 14.27 15.29 14.16
Beta 1.06 1.00 1.03 1.00 Sharp ratio 0.72 0.70 0.46 0.29 Ex post tracking error
3.16 4.58
Information ratio 0.38 0.64 Source: ABN Amro
The guideline for our work
SRI +
SRI
SRI -
Society improving
Positive criteria
Neutral
Low tolerance
Zero tolerance
Area of activity•New energy forms•Health improvement•Environmental
Area of activity•Production of nuclear power•Pornography•Tobacco•Alcohol•Gambling•Weaponry
Area of conduct
• Developing in under developing countries
• Environmental improving• Sustainable use of resources
• Sustainable labour right
Area of conduct•Contraventions of Rights of the Child
•Contraventions of labour force•Contraventions of human right
•pollution•Contraventions of biological diversity
•Destroying of cultural monument•Some biotechnology areas
Ovf’s Social ResponsibleInvestment
SRI
The church fundamental ethical principles
Corporate governance
Profit
Publcity
Investment Universe
Negativecriteria
Positive criteria
Investment Universe Investment Universe
Investment Universe
The SRI criteria
The Investment policy
Some scenarios
• We go for the optimal scenario
Asset class Defenciv Offenciv OptimalCashDomestic Fixed IncomeForeigan Fixed IncomeDomestic EquityForeigan EquityHedgefundTime horison in year 1 5 1 5 1 5Estimated Return 6,9 % 39,8 % 8,0 % 47,0 % 7,1 % 40,8 %Value at Risk -2,2 % 14,2 % -12,8 % -10,7 % -3,5 % 10,9 %
0 %30 %30 %0 %
10 %10 %
15 %40 %10 %10 %15 %10 %
10 %30 %
20 %40 %10 %10 %
The Yale Endowment
The hedge of Real Estate
• We belief that Real Estate whit good contract give just as god hedge as hedge fund
Opplysningsvesenets fond – financial asset and return
Opplysningsvesenets fond financial assetNOK 1700 million/EUR 200 million
13 %
32 %
13 %9 %
2 %
16 %
15 %Domestic Equity
Fixed Income
Foreigan Equity
Absolut Return
Private Equity
Real Asset
Cash
2006 oct 2005 2004 2003 2002 2001 2000 1999Marked Value in million NOK 1726 1659 1397 1366 1180 1481 1610 1500Return in % 5,68 18,54 12,65 9,97 -13,78 -6,95 8,16 23,71
Society Improving investment
Society Improving investment• Undeveloped
countries● Finarca (leasing) 7
million NOK● LAAD (agricultural
bank) 7 million NOK● Solidus
(microfinance) 7 million NOK
● Kolibri kapital (microfinance) 0,5 million NOK
● Chikweti Forrest 40 million NOK
• Renewable energy● Kraftpartner 1,5
million NOK
• Health care● NeoMed 8 million
NOK
• Other● Verdibanken 3
million NOK
• Total 74 mill / 4,3% of financial asset
How fait consistent are the investment?
• Different SRI criteria– Society Improving
investing– No to activity of
enterprises– No to conduct of
enterprises– Best in class
• Different instrument– Hedge fund– Commodities– Derivatives– Fixed income– Private Equity– Real Estate– Equity– CDO’s– Forestry– Micro finance
Thank you
Harald Magne Glomdal
Phone: +47 23081580 Mobil: +47 45005321
Appendix
Correlation of asset class
Efficient frontierAdding alternative assets to the investable universe vastly improved theavailable set of efficient portfolios. Hedge funds and real estate offered the best efficiency in the alternative asset universe.
Return of hedge fund and volatility
Return and montley observation of private equity
Commodity return
Indexes